AIG to settle probes for $1 billion: WSJ
January 13, 2006
SAN FRANCISCO (MarketWatch) -- American International Group Inc. is expected to pay more than $1 billion to settle civil-fraud investigations by state and federal authorities, according to a media report Friday.
The tentative terms would represent one of the steepest monetary penalties ever paid by a financial company, The Wall Street Journal reported in its online edition, citing unnamed people familiar with the matter. See Wall Street Journal story (subscription required)
The deal, which would also include the Securities and Exchange Commission, is likely to be reached with AIG in two to three weeks, The Journal said.
The settlement would end a suit filed in May by the New York attorney general's office and the New York State Insurance Department, alleging that the giant insurer and its former chief executive used improper accounting maneuvers in recent years to polish results, misleading investors and state regulators in the process, according to The Journal. The SEC hasn't filed suit but is investigating the giant insurer.
Not included in the settlement is Maurice R. "Hank" Greenberg, AIG's former chief executive, who also is named as a defendant in the May lawsuit, according to the report. Greenberg is fighting the lawsuit in court.
AIG is the world's largest publicly traded seller of property-casualty insurance and the largest life insurer in the U.S., as measured by premiums. It does business in more than 100 countries, The Journal said.
A spokesman for the company said AIG continues to cooperate with all regulators. The Journal said, while spokesmen for the SEC and the New York State Insurance Department declined to comment.
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